Thursday, February 2, 2017

Some pretty harsh ratings of the Irish Health system have been released by the Euro Health Consumer Index back at the end of January. Overall, based on data across 35 countries, including European Union member states, Norway, Iceland, Switzerland and the Balkan states (Montenegro, Albania, Serbia and FYR Macedonia), Irish health system ranks miserly 21st, scoring 689 points across 6 key macro-categories of assessment (or sub-disciplines).

The sub-disciplines on which assessments were based are:

1) Patient Rights and Information

2) Accessibility (waiting times of treatment)

3) Outcomes

4) Range and reach of services

5) Prevention

6) Pharmaceuticals

Ireland’s total score is statistically indistinguishable with a higher-ranked FYR of Macedonia (20th place), not exactly a known powerhouse of social or public services and Italy (ranked 22nd). With exception of Italy, Ireland’s ranking is the weakest amongst all high income countries present in the EU and in the sample overall.

The issue of income and relationship between amounts spent on healthcare and the system performance is a complex one. And the report does attempt some analysis of this. However, it might be an interesting exercise to see, just how much better would Ireland’s system perform were we to adapt the best practices found across each sub-discipline amongst two subsets of the countries, both with vastly lower incomes than here.

I undertake this exercise below under two scenarios. For each sub-discipline:

1) Scenario IRL “Peripheral” assumes that Ireland adopts the best practice found in the group of the euro ‘peripherals’ states (Greece, Ireland, Italy, Portugal and Spain); and

2) Scenario IRL “Emerging” assumes that Ireland adopts the best practice found in the group of the sampled states that comprise emerging economies of East-Central Europe (Slovenia, Estonia, Croatia, FYR Macedonia, Slovakia, Serbia, Lithuania, Latvia, Hungary, Poland, Albania, Bulgaria, Montenegro and Romania).

Note: these are not exactly scientific exercises, so treat them as an indicative analysts, rather than an in-depth and conclusive. However, I did perform some simple statistical robustness checks on these findings and they do not appear to be complete ad hoc.

The two scenarios are co-plotted in the following charts alongside the actual Euro Health Consumer Index scores:

As shown in the last chart above, adopting best practices from the countries with vastly lower incomes (and, thus, lower per capita expenditures on healthcare - controlling for the argument that the issue with Irish system is lack of money) would have resulted in a vastly better performance of the system across the board. That is because with exception of just one sub-discipline (Pharmaceuticals), Ireland’s performance is substantially sub-par when compared to the lower income countries best practice experiences.

The truth is: the Euro Health Consumer Index suggests that the real problem with Irish health system's abysmal performance is not necessarily solely down to the lack of money (although that too might be the case) but may be significantly down to the lack of will to adapt some of the better practices that are, apparently, available and accessible for lower income economies. Yet, despite this pretty simple to grasp observation, majority of Irish analysts and media continue to insist that improving Irish health system requires only one thing: more cash from the taxpayers. What's the margin of error on this argument, given Macedonia scores better on Health Index than Ireland? I would say it is huge.

Disclaimer

This blog represents my personal views and is not reflective of the views or opinions held by any company, contractor, client or employer I work for currently or have worked for in the past. These views are not an endorsement to take any action in the markets or of any political position, figures or parties.

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